LEGAL UPDATE: Supreme Court Confirms CPA Section 14 Rules for Residential Leases

The Final Word: “Ordinary Course of Business” for Residential Property Made Clear

By Cilna Steyn, MD, SBL Inc. Providing Legal Certainty for the Property Sector.

For years, most people in the South African property sector have assumed that Section 14 of the Consumer Protection Act (CPA) applies to almost all residential lease agreements. Until now, there was always a small question mark over whether landlords renting just one property might be exempt.

The Supreme Court of Appeal (SCA) has now made it clear: by far the majority of landlords, even those with only one property, must follow CPA Section 14. This removes any remaining doubt.

This ruling is made based on its binding judgment in Els v Venter and Another (449/2024) ZASCA 163.

Why This SCA Ruling Matters

The SCA looked at the legal test: does the landlord rent out the property “in the ordinary course of business”?

It clarified that landlords do not need to rent properties as their full-time job to be considered a business. If a person rents out property regularly, even if it is just a single flat or room, that counts as a commercial activity. This means that the previous idea that single-property landlords could avoid CPA rules is officially closed.

What This Means for Property Practitioners

For property practitioners, this ruling also has important implications. Whenever a professional property practitioner is involved in managing a lease, it serves as clear proof that the landlord is operating commercially. Property practitioners can no longer draft leases that try to bypass the CPA rules, particularly the tenant’s right to cancel early. Ignoring these requirements could result in financial loss for landlords and could even lead to negligence claims against property practitioners for failing to provide proper guidance.

How to Comply with CPA Section 14

In practical terms, all new and renewed leases must clearly state that tenants have the right to cancel with twenty business days’ written notice. Any penalties charged for early cancellation must be fair and should reflect the landlord’s real efforts and success in re-letting the property.

Important Legal Reminder About Evictions

It is important to remember that even when a tenant cancels a lease legally under the CPA, the landlord must still follow the Prevention of Illegal Eviction from and Unlawful Occupation of Land (PIE) Act to remove the tenant lawfully. Eviction law is strict and separate from the CPA, so legal guidance is essential. Just because cancellation is allowed does not mean eviction happens automatically.

My final thought

The Supreme Court of Appeal has confirmed that CPA Section 14 applies to almost all residential leases, including those held by single-property landlords. Tenants’ rights are fully protected, and property practitioners and landlords must comply with the law to avoid financial or legal consequences. This ruling provides the property sector with full legal certainty moving forward.